Bonamici, Blumenauer pledge renewed effort for restaurant grants
U.S. Rep. Suzanne Bonamici has pledged a renewed effort in Congress — one U.S. Rep. Earl Blumenauer will lead — to provide federal aid to independent restaurants in danger of going under as a result of the coronavirus pandemic.
Bonamici spoke after a virtual roundtable discussion with restaurant owners. She is a Democrat from Beaverton who represents the 1st District of northwest Oregon and Portland west of the Willamette River.
"Despite the best efforts of my colleagues and I in the House, we know that federal relief has not met your needs," Bonamici said. "Your stories will help.
"I have said this before: When we talk about policy in the abstract, it's not the same as talking about how policies affect real people, real small businesses and business owners and real communities."
Blumenauer, a Democrat from Portland, was the original sponsor of legislation in June to set aside $120 billion for direct grants to independent restaurants for payroll and benefits, food rent, utilities and other expenses. The House included that bill Oct. 1 as part of its $2.2 trillion follow-up to the CARES Act for more coronavirus aid. But the money was dropped in December, after the Senate's majority Republicans pared down the final plan to $900 billion that Congress passed and President Donald Trump signed.
The new 117th Congress, which has tenuous Democratic majorities in both chambers, started Jan. 3.
Blumenauer, whose 3rd District includes Portland east of the Willamette, says he will try again as Democrat Joe Biden assumes the presidency Jan. 20.
"Time is running out for local, independent restaurants," he said in a statement Tuesday, Jan. 19. "For these half a million restaurants, diners, coffee shops and bars to have any fighting chance of staying in business, we need to immediately take up my legislation with the new Congress and the Biden administration."
His bill is the RESTAURANTS Act, which stands for "Real Economic Support That Acknowledges Unique Restaurant Assistance Needed To Survive."
It would give priority to businesses owned by women and racial and ethnic minorities. It also would limit eligibility to food service or drinking establishments with 20 or fewer locations and are not publicly traded.
Problems with aid
Blumenauer and Bonamici conceded the shortcomings for restaurant owners of the Paycheck Protection Program, which provides short-term help for millions of businesses through a network of lenders overseen by the U.S. Small Business Administration. The latest federal coronavirus aid plan earmarked a total of $284 billion for the program, following initial rounds of $349 billion in the CARES Act (which went in just two days last spring) and $320 billion.
Congress wrote new restrictions after news disclosures about some large restaurant chains obtaining loans under the program. Some of them returned the money.
"We were able to make some gains in the year-end funding package to help restaurants," Bonamici said, such as changing the loan formula in the program to account for fixed costs. "But we know those changes were not enough."
According to a federal report, 66,099 Oregon businesses of all types received a total of $7.1 billion in the initial rounds of the program, with an average loan of $106,694. Full-service restaurants accounted for the highest share of loans at 2,793.
But restaurant owners complained that the program was too complex. The original period was for eight weeks, later set at 24 weeks. Though the money originally was in the form of loans, the amounts could be forgiven if businesses met specified requirements, such as spending on payroll and retention of employees. But lockdowns prompted by the pandemic limited the work employees could do.
"I took out the loans with the hope that the terms might change so that it could become grant money," Lisa Schroeder of Mother's Bistro and Bar in downtown Portland said. "Sadly, we had to use most of the money for payroll within 24 weeks of receiving the money."
Schroeder said her business is down from 102 employees to 10.
Airlines got an earmarked $50 billion under the CARES Act, the initial $2.2 trillion in coronavirus aid Congress passed 10 months ago. Schroeder said small businesses like hers also deserve help.
"We do not have big lobbyists in Washington, D.C., to fight the battle for us," she said.
"I just want to say that we have never asked for anything before. In all the years we have been around, this is one time we need a bailout — not loans, not things we need to pay back in six years. We need the government to understand this is totally different."
The pandemic has spurred the formation of Independent Restaurant Alliance of Oregon, whose advisory board chair is Katy Connors, operations manager of Portland's Hat Yai restaurants named after a city in southern Thailand.
She said the alliance began with 50 to 60 restaurants in the Portland area, but has since branched out statewide.
"We spent our first couple of months focused only on program education because of how complicated it was," Connors said. "It was really difficult, not only for the restaurants we worked with but also the whole community, to understand and grab hold of the program and utilize it in a way that would be effective."
'Hard to come back'
For many weeks, Oregon restaurants were limited to takeout and delivery service, and then limited in-person dining at a fraction of their seating capacity. For most of Oregon's 36 counties, the current rules, in effect since Dec. 3, bar indoor dining and restrict outdoor dining to tables of six.
"A loan, when you have 90% loss of revenues, isn't helpful," Micha Lattek said of his Street 14 Café in Astoria, which is closed.
Lattek said he did obtain a loan, but his workforce shrank from 15 to three. While he plans to seek a new loan, he said, "there is no market out there for a restaurant to cater to."
Adebola Adewumi said his problem was that Rush Bowls health food opened in Hillsboro in the last quarter of 2019, "so that is why it was hard to show that (25%) loss for a restaurant like mine" for a loan, he said.
Michael Gibbons said the program did help his businesses. They are Papa Haydn restaurants in Northwest Portland and Sellwood and Jo's Bar & Rotisserie, also in Northwest Portland.
"We wouldn't have made it through without it," he said. "In its defense, it was put together on the fly and adjusted by Congress. But the 24 weeks were not enough."
Gibbons said he started the pandemic with 107 employees — a normal summer would have boosted that total to around 140 — but is down to 16.
When his loan period ended in October, Gibbons said he had $75,000 left. He has spent it, and he told Bonamici he hopes he will obtain retroactive approval to do so under the renewed program.
Blumenauer said last fall that if the pandemic continues, a report by the National Bureau of Economic Research — a private nonprofit based in Cambridge, Mass. — projects that only 15% of independent restaurants may survive.
"It's going to be hard to come back to any sense of financial security during the next five years," Gibbons said.
NOTE: This story is reposted with additional comments from restaurant owners.
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